14 Best Consumer Staples Dividend Stocks To Buy Now
In this article, we discuss 14 best consumer staple stocks to buy now. You can skip our detailed analysis of the consumer staples sector and dividend investment, and go directly to read 5 Best Consumer Staples Dividend Stocks To Buy Now.
The companies in the consumer staples sector produce and sell essential products that people need on a daily basis. People consume these products regularly, regardless of the state of the economy or their personal financial condition. Because of these defensive qualities, these companies are relatively stable investments as they tend to have steady demand for their products. Despite high inflation last year, the consumer staples sector delivered well and outperformed the wider market by a broad margin. The S&P Consumer Staples Select Sector index gained 0.37% through December 9, 2022, compared with a 16.17% drop in the S&P 500, according to Fidelity.
CNBC referred to data from the Commerce Department, which mentioned that advanced retail sales grew by 3% in January, versus estimates of 1.9%. Moreover, retail sales increased by 6.4% from the same period last year. The report also mentioned that consumer spending represents nearly two-thirds of the economic activity in the US, which means that consumers continue to spend despite elevated inflation.
Analysts are presenting a positive outlook on the consumer staples sector this year as well. Though the sector is not completely immune to economic challenges, these companies can perform better by reporting growing sales volumes. Moreover, the companies in the sector have consistent cash flows and strong balance sheets, which is important from a dividend point of view. Walmart Inc. (NYSE:WMT), The Procter & Gamble Company (NYSE:PG), and PepsiCo, Inc. (NASDAQ:PEP) are some of the well-known consumer staples stocks that pay regular dividends to shareholders. Given this, we will discuss the best consumer staples dividend stocks in this article.
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Our Methodology:
For this list, we identified dividend-paying stocks from the S&P 500 Consumer Staples Index with strong dividend growth track records. After that, we sorted these dividend stocks using Insider Monkey’s proprietary hedge fund sentiment data as of Q4 2022, which means that these stocks are the most popular dividend stocks among the elite hedge funds. The list is ranked in ascending order of the number of hedge funds having stakes in the companies.
14 Best Consumer Staples Dividend Stocks To Buy Now
14. Kimberly-Clark Corporation (NYSE:KMB)
Number of Hedge Fund Holders: 30
Dividend Yield as of March 6: 3.74% Kimberly-Clark Corporation (NYSE:KMB) is a Texas-based manufacturing company that specializes in personal care and paper-based consumer products. On January 25, the company declared a 1.7% hike in its quarterly dividend to $1.18 per share. This marked the company's 51st consecutive year of dividend growth, which makes it one of the best consumer staples dividend stocks on our list. The stock's dividend yield on March 6 came in at 3.74%. In addition to Walmart Inc. (NYSE:WMT), The Procter & Gamble Company (NYSE:PG), and PepsiCo, Inc. (NASDAQ:PEP), Kimberly-Clark Corporation (NYSE:KMB) is a very good reliable option for income investors. In January, UBS raised its price target on Kimberly-Clark Corporation (NYSE:KMB) to $136 with a Neutral rating on the shares, expecting the company to show gross margin recovery this year. At the end of Q4 2022, 30 hedge funds tracked by Insider Monkey reported having stakes in Kimberly-Clark Corporation (NYSE:KMB), with a total value of over $823.2 million. Among these hedge funds, Two Sigma Advisors was the company's leading stakeholder in Q4.
13. The Clorox Company (NYSE:CLX)
Number of Hedge Fund Holders: 34
Dividend Yield as of March 6: 3.03%
The Clorox Company (NYSE:CLX) is a California-based manufacturing company that specializes in consumer and professional products. On February 15, the company declared a quarterly dividend of $1.18 per share, which fell in line with its previous dividend. The company has been raising its dividends consistently for the past 20 years and has paid dividends for over 50 years consecutively. The stock has a dividend yield of 3.03%, as of March 6. The company is among the best consumer staples dividend stocks on our list.
In fiscal Q2 2023, The Clorox Company (NYSE:CLX) reported revenue of $1.72 billion, which showed a 1.4% growth from the same period last year. Year-to-date, the company's operating cash flow came in at $387 million, up from $222 million from the prior-year period.
The number of hedge funds tracked by Insider Monkey owning stakes in The Clorox Company (NYSE:CLX) grew to 34 in Q4 2022, from 27 in the previous quarter. The total value of these stakes is over $764.3 million. Among these hedge funds, Viking Global was the company's leading stakeholder in Q4.
12. The Hershey Company (NYSE:HSY)
Number of Hedge Fund Holders: 37
Dividend Yield as of March 6: 1.74%
The Hershey Company (NYSE:HSY) is an American multinational company that specializes in the production of chocolate and other baked products. The company recently announced the completion of the purchase of one million shares of its common stock from Hershey Trust Company worth $240 million.
In February, Goldman Sachs raised its price target on The Hershey Company (NYSE:HSY) to $177 with a Buy rating on the shares, highlighting the company's solid top and bottom-line beat.
The Hershey Company (NYSE:HSY), one of the best consumer staples dividend stocks, currently pays a quarterly dividend of $1.036 per share. In 2022, the company extended its dividend growth streak to 13 years. The stock's dividend yield on March 6 came in at 1.74%.
As of the close of Q4 2022, 37 hedge funds tracked by Insider Monkey reported owning stakes in The Hershey Company (NYSE:HSY), compared with 42 in the previous quarter. These stakes have a total value of over $1.25 billion.
11. Archer-Daniels-Midland Company (NYSE:ADM)
Number of Hedge Fund Holders: 40
Dividend Yield as of March 6: 2.22%
Archer-Daniels-Midland Company (NYSE:ADM) is an Illinois-based food processing company that has over 270 food processing plants across the globe. Stifel raised its price target on the stock to $116 with a Buy rating on the shares, appreciating the company's recent quarterly earnings.
In the fourth quarter of 2022, Archer-Daniels-Midland Company (NYSE:ADM) posted revenue of $26.2 billion, up 13.6% from the same period last year. For FY22, the company's operating cash flow came in at $5.3 billion. Moreover, it returned $2.3 billion to shareholders in dividends and share repurchases, which makes it one of the best consumer staples dividend stocks to buy.
On January 26, Archer-Daniels-Midland Company (NYSE:ADM) declared a quarterly dividend of $0.45 per share, raising it by 12.5%. Through this increase, the company achieved its Dividend King status as this was the company's 50th consecutive year of dividend growth. The stock has a dividend yield of 2.22%, as of March 6.
At the end of Q4 2022, 40 hedge funds tracked by Insider Monkey reported owning stakes in Archer-Daniels-Midland Company (NYSE:ADM), up from 37 in the previous quarter. These stakes have a consolidated value of $701.5 million.
Diamond Hill Capital mentioned Archer-Daniels-Midland Company (NYSE:ADM) in its Q1 2022 investor letter. Here is what the firm has to say:
“ADM is a leading agricultural processor that also operates a global nutrition business focused on the development of ingredients and flavors for food and beverages, supplements and more. The company’s recent operating results have benefited (unfortunately) from the war in Ukraine as grain prices and agricultural markets globally experienced strong price increases. ADM is positioned well to benefit from the volatility due to its stable North American agricultural base.”
10. Sysco Corporation (NYSE:SYY)
Number of Hedge Fund Holders: 41
Dividend Yield as of March 6: 2.57%
Sysco Corporation (NYSE:SYY) is an American wholesale company that specializes in the distribution and marketing of a wide range of consumer and healthcare goods. The company currently pays a quarterly dividend of $0.49 per share and has a dividend yield of 2.57%, as of March 6. It has been raising its dividends consistently for the past 53 years, which places it as one of the best consumer staples dividend stocks to buy.
In fiscal Q2 2023, Sysco Corporation (NYSE:SYY) reported a 14% year-over-year growth in its revenue to $18.6 billion. During the first 26 weeks of fiscal 2023, the company returned $766 million to shareholders, including roughly $500 million in dividends.
In February, BMO Capital maintained an Outperform rating on Sysco Corporation (NYSE:SYY) with a $90 price target, appreciating the company's guidance for FY23.
As per Insider Monkey’s Q4 2022 database, 41 hedge funds owned investments in Sysco Corporation (NYSE:SYY), up from 40 a quarter earlier. The collective value of these investments is over $728.5 million. With over 1.5 million shares, D E Shaw was the company’s leading stakeholder.
9. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 45
Dividend Yield as of March 6: 8.08%
Altria Group, Inc. (NYSE:MO) is a Virginia-based tobacco company that produces related products. On March 1, the company declared a quarterly dividend of $0.94 per share, consistent with its previous dividend. The company is a Dividend King with 53 consecutive years of dividend growth. As of March 6, the stock has a dividend yield of 8.08%.
Altria Group, Inc. (NYSE:MO) remained committed to its shareholder obligation in FY22, returning $6.6 billion to investors in dividends. The company's strong dividend growth track record and solid dividend policy make it one of the best consumer staples dividend stocks.
At the end of Q4 2022, 45 hedge funds tracked by Insider Monkey reported owning stakes in Altria Group, Inc. (NYSE:MO), compared with 47 in the previous quarter. These stakes have a total value of over $1.8 billion. With over 12 million shares, GQG Partners was the company's leading stakeholder.
8. Mondelez International, Inc. (NASDAQ:MDLZ)
Number of Hedge Fund Holders: 46
Dividend Yield as of March 6: 2.34%
Mondelez International, Inc. (NASDAQ:MDLZ) is an American multinational confectionery, food, and beverage company that has operations in over 160 countries. Cowen raised its price target on the stock to $75 with an Outperform rating on the shares, presenting a positive outlook on the company's performance this year.
Mondelez International, Inc. (NASDAQ:MDLZ), one of the best consumer staples dividend stocks, has been raising its payouts for the past nine years. The company offers a quarterly dividend of $0.385 per share and has a dividend yield of 2.34%, as of March 6.
In the fourth quarter of 2022, Mondelez International, Inc. (NASDAQ:MDLZ) reported revenue of $8.8 billion, which showed a 15.1% growth from the same period last year. In FY22, the company's operating cash flow came in at $3.9 billion and its free cash flow for the year amounted to approximately $3 billion. It returned $4 billion to shareholders in dividends and share repurchases in 2022.
As per Insider Monkey's Q4 2022 database, 46 hedge funds owned investments in Mondelez International, Inc. (NASDAQ:MDLZ), worth over $1.5 billion collectively.
Here’s what Coho Partners said about Mondelez International, Inc. (NASDAQ:MDLZ) in its Q3 2022 investor letter:
“Analysts’ bottom-up estimates for both 2022 and 2023 for the S&P 500 Index are beginning to decline. Coho is not immune to the earnings pressure exerted by a strong USD, although the portfolio on the whole has modestly less foreign revenue exposure relative to the S&P 500 Index. The two most impacted Coho stocks includes Mondelez International (NASDAQ:MDLZ), which gets about 75% of its revenues outside the U.S.”
7. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 47
Dividend Yield as of March 6: 5.12%
Philip Morris International Inc. (NYSE:PM) is a New York-based multinational tobacco company that sells its products in over 180 countries. In March, UBS upgraded the stock to Buy and also lifted its price target on the stock to $116. The firm expects an acceleration of 'heated tobacco' products in mature markets and also appreciated the company's strong cash flow.
Philip Morris International Inc. (NYSE:PM) maintains a 14-year streak of consistent dividend growth. The company offers a per-share dividend of $1.27 every quarter and has a dividend yield of 5.12%, as recorded on March 6. It is among the best consumer staples dividend stocks on our list.
In Q4 2022, Philip Morris International Inc. (NYSE:PM) posted revenue of $8.15 billion, which showed a 0.8% growth from the same period last year. At the end of December 2022, the company had over $3.2 billion available in cash and cash equivalents and its total assets amounted to over $61.6 billion.
As of the close of Q4 2022, 47 hedge funds tracked by Insider Monkey reported owning stakes in Philip Morris International Inc. (NYSE:PM), with a total value of over $6.2 billion. Rajiv Jain and Terry Smith were some of the company's major stakeholders in Q4.
6. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 58
Dividend Yield as of March 6: 3.10%
The Coca-Cola Company (NYSE:KO) showed strong earnings in its Q4 2022 report. The company's revenue for the quarter came in at $10.1 billion, which showed a 6.3% growth from the same period last year. For FY22, the company's operating cash flow stood at $11 billion and its free cash flow amounted to $9.5 billion. This cash generation was sufficient for its $7.6 billion worth of dividend payments throughout the year.
One of the best consumer staples dividend stocks, The Coca-Cola Company (NYSE:KO) has been raising its dividends consistently for the past 61 years. The company offers a quarterly dividend of $0.46 per share for a dividend yield of 3.10%, as of March 6. Other popular dividend stocks in the sector include Walmart Inc. (NYSE:WMT), The Procter & Gamble Company (NYSE:PG), and PepsiCo, Inc. (NASDAQ:PEP).
Berkshire Hathaway was the largest stakeholder of The Coca-Cola Company (NYSE:KO) in Q4 2022, owning 400 million shares in the company. Overall, 58 hedge funds in Insider Monkey’s database owned stakes in the company, worth $28.8 billion collectively.
Rowan Street Capital mentioned The Coca-Cola Company (NYSE:KO) in its Q4 2022 investor letter. Here is what the firm has to say:
“Let’s take The Coca-Cola Company (NYSE:KO) for example. Its dividend yield is 2.8%, earnings are estimated to grow at only 3.6% rate per year over next 4 years, and its earnings multiple is currently at 24x (based on next years forecasted earnings). KO has an anemic growth, so we can argue that paying 24x earnings is not very attractive. Let’s assume that the multiple will stay constant over the next 3-5 years, thus our expected annual returns will be 2.8%+3.6% = 6.4% (that is below the current reported inflation rate and only slightly above the risk-free rate of 4%).”
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Disclosure. None. 14 Best Consumer Staples Dividend Stocks To Buy Now is originally published on Insider Monkey.